This Hot Brooklyn Startup's Growth Engine: Sharing-Economy Talent

Brooklinen, a startup in Brookyn, N.Y., that sells stylish luxury bed linens online, is on track to hit $10 million in revenue this year, after 21 months in business, thanks to an unusual approach to scaling.

The company, launched in October 2014 by husband and wife Rich and Vicki Fulop, has relied almost entirely on freelance and sharing economy services to expand its reach. Brooklinen made it to $750,000 in revenue before hiring its first employee in late 2015, providing an interesting look at what is possible when free agents work collaboratively with each other.

When the Fulops, who got married in 2010, started the business, Rich was an MBA student at NYU’s Stern School of Business and Vicki was an account executive at a public relations agency in New York City. After coming across set of sheets they loved on a 2012 vacation—and learning that it cost a whopping $800—they saw a gap in the marketplace.

They had soon come up with the idea for a business that would sell high-quality linens with clean, minimalist designs from an online store for a much lower price point than comparable luxury products. Here’s how they pulled it off:

Brooklinen co-founders Rich and Vicki Fulop

Give yourself a crash course. Rich was able to tap his professors at NYU for business advice, but neither he nor Vicki was born into the linens business or had studied it. That meant they had to figure out how to design and manufacture sheets from scratch.

They took a DIY approach. “We went to Barnes &
Noble and bought books on learn how to weave,” recalls Rich. “We taught ourselves the industry.”

One reason high-quality sheets are so expensive is that there are a lot of middlemen involved in making them, they discovered. By creating a business model where they could make the sheets themselves and sell direct to consumers on the web, they realized they could keep cost down.

To lower their overhead further, they looked for manufacturers in countries that had free trade agreements with the U.S., such as Canada, Mexico, Israel and Peru. They soon found a plant in Israel to make their linens and one in Canada to make down products.

Do on-the-ground research. Given their own reaction to the $800 sheets, the Fulops knew that the price point they chose would make or break their business. Instead of guessing at what it should be, they went straight to their target customers. They surveyed 500 people who were shopping at big box stores to find out what they were willing to pay for a high-quality set of sheets.

“Our initial model was we were going to sell the core sheet set for $195,” says Rich. “What we heard over and over was `I’ve got to think about it for $200. If you start them at $100, then I’ll follow the wisdom of crowds. The reviews are great. I’ll try it out.’” Today, the Classic Core Set, with a flat sheet, a fitted sheet and two pillowcases sells for $109, with their premium products priced higher.